Could CA's climate credit bypass poor?

FILE - In this April 30, 2008 file photo, American flags are seen near the Shell refinery, in Martinez, Calif. The California Air Resources Board was expected to pass a key piece of the state’s 2006 climate law, called AB32, at its meetings Thursday, Dec. 16 or Friday, Dec. 17, 2010. If it passes, power plants, refineries and other major greenhouse gas emitters will have pollution capped by new regulations being considered by the regulatory agency. The new rules set up the nation's most extensive carbon trading market that officials hope will provide a financial incentive for the state's worst polluters to cut emissions. (AP Photo/Ben Margot, File)
— AP

FILE - In this April 30, 2008 file photo, American flags are seen near the Shell refinery, in Martinez, Calif. The California Air Resources Board was expected to pass a key piece of the state’s 2006 climate law, called AB32, at its meetings Thursday, Dec. 16 or Friday, Dec. 17, 2010. If it passes, power plants, refineries and other major greenhouse gas emitters will have pollution capped by new regulations being considered by the regulatory agency. The new rules set up the nation's most extensive carbon trading market that officials hope will provide a financial incentive for the state's worst polluters to cut emissions. (AP Photo/Ben Margot, File)
/ AP

California's new climate credit would be counted against subsidies for many poor households in Southern California under proposals by San Diego Gas & Electric and Southern California Edison.

Consumer groups say the move would effectively eradicate the climate credit for low-income customers, defeating one central purpose of the set-aside.

Arriving with utility bills this month and again in October, the climate credit reduces household electricity charges in the San Diego region by $36.24. The funds come from California's cap-and-trade program, the nation’s first economywide approach for controlling pollution by capping total greenhouse gas emissions and issuing pollution permits that can be bought or sold by companies.

State officials have heavily promoted the credit -- in utility bill inserts, paid advertisements, media briefings and internet announcements -- as an opportunity to invest in energy saving gadgets or appliances. Ideally, those purchases would save customers more money on future utility bills while conserving energy and reducing pollution from power plants.

Several people familiar with the inner workings of the California Public Utilities Commission said the utilities' position is unlikely to gain traction with decision makers. Still, lengthy briefings and utility-bill calculations have been submitted on both sides of the issue by experts and attorneys whose work is paid for by utility customers.

The issue is scheduled to be resolved later this year, but could be postponed further.

"I hope the commission isn’t going there because it seems contrary to everything that it has been saying on this issue,” said Matt Freedman, an attorney at The Utility Reform Network, or TURN. “It would be, with one hand they give and the other hand they take away."

Edward Randolph, director of the energy division at the utilities commission, said subsidized customers, by statute and under utility commission rules, are due both the climate credit and a 30 to 35 percent bill discount.

"The climate credit is here to stay," he said. "There is no intention by anybody at the state level of undermining that commitment to have all customers see what is, on average, a $35 credit twice a year."

The credit was designed to provide relief as the costs of cap-and-trade permits resound through the economy.

Edison and SDG&E contend that the credit would render meaningless new limitations on subsidies to its low-income customers.

Legislation signed by Gov. Jerry Brown last year is set to reduce the current discount on electricity for residential low-income customers to between 30 percent and 35 percent of what unsubsidized customers pay.

Excluding the credit from that calculation would "provide a disproportionately greater percentage discount" to subsidized customers, Edison wrote to the commission.

SDG&E spokeswoman Stephanie Donovan said that the climate credit interferes with instructions from state lawmakers and the utilities commission to reduce and stabilize subsidies. Awarding the credit on top of subsidies is unfair to unsubsidized large consumers of home electricity, who underwrite low-income subsidies through utility bill charges listed under "Public Purpose Programs," she said.